Crime and Corruption--Posner's Comment

The basic economic objection to crime is that a crime is a costly but sterile transaction. It redistributes wealth, which doesn't increase the size of the social pie; and therefore the costs involved in crime—the time and other inputs of the criminal, and the defensive measures taken by potential victims—are a deadweight loss to society. But notice that the economic definition of crime as a sterile transaction (or coerced transfer payment) does not correspond to the legal definition of crime; in law, a crime is anything that the government forbids on pain of criminal penalties. Victimless crimes tend to be productive transactions, which make the parties better off (at least by their own lights). Attempting to deter or prevent such transactions are likely therefore to reduce the overall social welfare, like other interferences with the operation of free markets. Of course there may be external costs, costs external to the parties to the drug transaction or other victimless crime, that in some cases justify punishment, but this is probably not true in general. So the first question to consider in assessing the effects of crime on economic welfare is how much of what is criminalized should be. Bribery of officials is, as Becker points out, an interesting mixed case. It is a voluntary transaction with external costs, but sometimes the social benefits exceed those costs, as where the bribe results in circumvention of an inefficient restriction on commercial activity. Robberies, kidnappings, and other coerced transfers involve a reallocation of resources from productive commercial activities to a zero-sum game of attack and defend. But I am not sure that we should expect this type of criminality to be a simple function of poor prospects for legal employment. If everyone has poor prospects, and is therefore poor, the gains from crime will be meager; both the benefits of crime and the opportunity costs of the criminal (mainly what he could earn in legal employment) will be depressed. Steeply unequal incomes would seem a better explanation for a high crime rate in a poor country, since despite the overall poverty there would be attractive targets for criminals. The high rate of kidnapping in Mexico City seems related to the fact that the city has many wealthy residents as well as many poor ones. Another factor in high crime rates in poor countries is that it is difficult to finance an effective apparatus for fighting crime. It requires police and judges who are paid enough not to be readily bribable by criminal gangs; in addition, the police must be sufficiently numerous and well-armed to be capable of protecting judges, witnesses, and criminal investigators. So there is a chicken and egg problem: a poor country has difficulty affording the means of preventing crimes rates from skyrocketing, and the high crime rates help to keep the country poor. It is true that the aggregate expense of even well-paid police and judges is likely to be only a small percentage of GDP even in a poor country. But it is difficult to set a wage scale for a class of workers that is grossly in excess of prevailing wages for work involving similar skills and education. A possible response to resource limitations on crime fighting is very severe punishment of convicted criminals. The threat of punishment has a deterrent effect, provided the probability of punishment is not negligible; and as Becker long ago pointed out in his famous 1968 article on crime and punishment, making the threat is a lot cheaper than hiring a huge police force. In other words, resources on maintaining a high probability of apprehending and punishing criminals can be economized on, without lose of deterrence, by jacking up the punishment of those who are apprehended; the expected cost of punishment need be no higher. Moreover, the probability of apprehension and conviction can be cheaply enhanced, too, by reducing the procedural rights of criminal defendants. In addition, purging the statute books of victimless crimes, and eliminating foolish regulations that invite bribery to circumvent them, can reduce demands on the criminal justice system and permit refocusing it on the crimes that impose the greatest costs on the society.

Comments

[owinok]

In my view, the most interesting point is the realization that low income countries are incapable of financing an effective apparatus for fighting crime. This may involve not only the money but the thinking that allows for the prioritization of the crimes to respond to. In many of these countries (and I am a resident of one), oftentimes the police spend a disproportionate part of their time arresting and ensuring state prosecution of producers and consumers of non-sanctioned liquor. This also suggests that the crime fighting units are not comprised of the right mix of professionals.

[James]

There are no victimless crimes - the victim is Jesus.

[ben]

James - Jesus is dead. He died about 2000 years ago.

[Tom]

Given the role of corruption in development that has been highlighted above, it would be interesting to look at the social returns to higher pay in the policing and legal professions in these countries. If graft could be avoided by augmenting salaries in these fields, stabilizing the enforcement of property rights and encouraging trade, the marginal benefits to increasing the pay of police officers and judges could well exceed the social costs of higher compensation.

[Bill]

The last paragraph of this post was very provocative:

"In other words, resources on maintaining a high probability of apprehending and punishing criminals can be economized on, ... by jacking up the punishment of those who are apprehended... Moreover, the probability of apprehension and conviction can be cheaply enhanced, too, by reducing the procedural rights of criminal defendants. In addition, purging the statute books of victimless crimes... can reduce demands on the criminal justice system and permit refocusing it on the crimes that impose the greatest costs on the society."

I assume you are proposing that it would be best to accomplish the last part of that paragraph first. I think the part where you mention that taking away procedural rights away from defendants is a very interesting topic. At first, I was a little upset that you seemed to mention it with such a cavalier attitude, but then I realized that I have often wondered about the same thing.

Purely as a hypothetical, what do Mr. Becker and Mr. Posner, and the other readers, think regarding the following famous quotation, which I will very badly paraphrase:

It is better that 10 guitly men go free than one innocent man be deprived of his liberty.

Do we really feel this way if it we had to choose between locking up 10 murderers and one totally innocent person, or letting all 11 go free?

How would a simple model of that look, I wonder?

[N.E.Hatfield]

Too be provocative, it can just as easily be said, " Tis far, far, better that 10 innocent men hang, than a guilty one go free". As for "due process" why bother? Is it not true that "Law & Order" are far more superior to Anarchy?

[Simon Elliott]

While there is a correlation between poverty and crime, there would appear to be many outliers. Anecdotal evidence suggests that crime is lower in very under-developed rural societies than in transitional economies, certainly lower than would be expected based on poverty alone. Perhaps the reason for this is that law making and law enforcement are more at the community level.

Therefore, I ask whether there is a correlation between crime and the degree of government centralization and control.

[Andrew]

Unfortunatly, I recently watched a beheading video on liveleak.com made by Ansar Al-Sunnah in Iraq. The video was in arabic, which I'm not fluent in, but the caption said that the man was being killed for selling drugs. Sure enough, before being executed he held some packets of pills in his hands that the camera zoomed in on. At first, my gut reaction was that this sort of thing was an unjustifiable barbaric act. But upon further reflecton, in the chaotic situation in Iraq, what other effective low cost crime deterrent do they have? (It was a Sunni group, sot they can't count on the Shia police.) Undoubtably one would think twice before selling drugs there after watching the video. That being said, we are incredibly lucky to live in a society with adequate resources to devote to our justice system, and the costs we incur are well worth it. Despite all of its problems, it sure beats a couple of guys wearing balaclavas with some guns, a knife, and a video camera.

[guy in the veal calf office]

I believe the adage of 10 criminals roaming free to save 1 innocent underlines the debate between liberty and utilitarianism. Many economists and adolescents prefer making policy choices based upon the greatest good for the greatest number (utilitarian). But economics is a still maturing field littered with discredited theories and thick with heated contests over the fundamentals. In contrast, liberty’s moral worth, and its instrumental value in creating powerful and wealthy societies-- appears beyond dispute and timeless, even by those who clamor for an exception or two for their pet project. (China’s story is not complete, and as Prof. Becker has noted, free markets often lead to free people).

To answer the question, we should lean to what we know works— e.g., liberty, protect the innocent— and let immature fields achieve consensus over generations before adopting their coercive policies— e.g., we should not deprive an individual of liberty for the theortical benefit to the many who might be harmed by 10 criminals.

Unfortunately, for liberty to be preeminent, government must have a limited role & ability to interfere with your life and if there’s anything a bureaucrat, politican, or typical academic (many excluded, included prof. Becker, of course) want, its to aggrandize themselves by forcibly leading everyone else to a better existence based on their prescriptions.

[John Alcorn]

Judge Posner:
Re: your endorsement of Prof. Becker's bricks-and-sticks theory of crime deterrence ("A possible response to resource limitations on crime fighting is very severe punishment of convicted criminals." Etc.)
George Akerlof and Janet Yellen present an alternative theory, in which optimal penalties depend on community norms of fair punishment. They posit a game of three players: law enforcement, criminals, and the community. Which coalition will form? Members of the community (third-party observers) often have indispensable information about crimes, and may dislike crime, but may nonetheless choose not to share information with law enforcement if they believe that punishments are excessive and do not fit the crime. Becker's deterrence model can backfire if it alienates the community more than do criminals. Akerlof and Yellen also argue that optimal law enforcement is similarly constrained by community norms of procedural fairness (e.g., norms against unfair profiling by police). Below I provide the bibliographic reference to their article. In your judgment, are Akerlof's and Yellen's arguments sound? Should community norms of fair punishment and of procedural fairness shape policing and sentencing?
PS: Thank you for the Becker-Posner blog - We in cyberspace appreciate your intellectual generosity and admire your ability to post weekly despite your many professional commitments.
"Gang Behavior, Law Enforcement and Community Values," (with Janet Yellen), in Henry Aaron,
Thomas Mann and Timothy Taylor, eds., Values and Public Policy, Brookings Institution, 1994.

[N.E.Hatfield]

"Unfair profiling" as a community norm. I like that. Does that mean that, an All Points Bulletin that lists a "white" "male" approx. 6'-6" tall weighing approx. 250 lbs. and wearing a black balaclava, dark blue jacket, faded blue jeans, black sneakers and driving a beat up old red Chevy, that was generated from a video image taken during an armed robbery, is somehow unfair and shouldn't be used for stopping and checking suspects?

Or is this "norm" politically created.

[John Alcorn]

N. E. Hatfied:
If I have understood Akerlof and Yellen correctly, effective policing requires community cooperation (because communities have a scarce strategic resource - information) and must therefore avoid frequent or flagrant violation of the community's norms of fairness. Perhaps such norms differ by community. True, Akerlof's and Yellen's model would lack traction if communities do not have deeply held norms of fair treatment and of fair punishment before the law - or if any such norms cannot be ascertained by empirical inquiry in particular communities.

[John Alcorn]

Thomas:
Thank you for sharing the fascinating article by Volokh.

[Haris]

"A possible response to resource limitations on crime fighting is very severe punishment of convicted criminals."

Wasn't this addressed by Thomas More in Utopia a few centuries ago? If punishments are disproportionate to the crime, we simply encourage more severe crimes. More's example was the death penalty, which was at the time given for both theft and murder. If you're a thief at the time, you might as well kill the person you're robbing. The penalty doesn't change, and you simply lower the risk of apprehension by killing a witness who could identify you. Given that we have an upper limit on severity of punishment [the death penalty] we'd eventually run into the problem, where crimes less severe than murder and rape would be punished by death, thus basically encouraging murder of victims and witnesses.

We already face a similar incentive problem in current criminal law: the felony murder rule can, in some situations, encourage mass murder. The rule says essentially that any death, even an accidental one, that occurs while a felony [robbery, etc] is in progress, the felons will be charged with murder. Now, if someone has a number of hostages, for example, and one of them accidentally dies, and the hostage taker is on the hook for murder, he might as well kill the rest of the hostages to eliminate people who can recognize him. The punishment barely increases [life without parole vs. death], but the chance of apprehension drops.

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